James Ashworth, Partner at Landwood Property Auctions, in conversation with Property Auction News
As we progress into 2024, has Landwood Auctions observed any notable trends within the residential auction market that differ from previous years (particularly in a high-interest rate environment)?
“Over the past year, we’ve witnessed a noticeable shift in property auctions following recent rising interest rates and changes in Section 21 and energy regulations.
“This has resulted in a substantial uptick in landlords choosing to auction their portfolios, with a remarkable 300% increase in buy-to-let instructions at Landwood Property Auctions.
“Over the past year, it’s become even more crucial to set a strategic and realistic reserve price to consistently achieve the best results possible. Success in today’s economic market requires an adaptable and pragmatic mindset.
Based on your experience, what are your forecasts for the residential property auction scene over the next 12 to 24 months?
“Drawing from our experience, we anticipate continued robust demand for residential property auctions in the coming 12 to 24 months, particularly as uncertainty persists around regulations such as Section 21, energy regulations, and tax policies.
“Additionally, factors like upcoming elections and the anticipated increase in distressed stock are likely to influence market dynamics.”
Could you share details of some standout residential and commercial auction sales at Landwood Auctions that have recently occurred?
“Among Landwood Property Auctions 2023’s highlights is the sale of a grand five-bedroom residential property in Buckinghamshire, achieving more than £2.1 million, an impressive 134% above the guide price, with more than 700 bids at a rate of one bid every 15 seconds.
“Within commercial listings, our team also sold an industrial 1,872 sq. land plot in Carlisle for 194% above guide price at nearly £31,000. The client was delighted with this, as essentially, they viewed it as a liability and as having no value to themselves.
“This is joined by a £1.2 million sale secured for a neglected and fire-damaged four-bed home in Hertfordshire. Within just one hour of bidding, our auction secured nearly 400 bids across the globe, taking the opening bid of £290,000 to a £1,201,250 sale – 300% above the guide.”
From your perspective, what are the primary risks and obstacles currently facing the residential auction market?
“The primary risks and obstacles in the residential auction market include punitive tax changes, high mortgage rates, and regulatory uncertainty. Distressed stock is increasing as buy-to-let landlords face challenges with regulations like Section 21 and energy efficiency. This uncertainty is prompting landlords to sell, attracting cash-only buyers. Overall, market stability hinges on resolving regulatory ambiguity and financial concerns.”
How do you believe the current macroeconomic factors are influencing the residential auction market, and what implications might these have moving forward?
“One notable trend is the influx of traders and full-time investors into the market, indicating their confidence in its stability and resilience against macroeconomic shifts.
“This suggests a confidence among investors who do not anticipate price drops and are positioning themselves to acquire properties before potential price rises.
“Looking ahead, we believe we will continue to see heightened investor activity driving competition. At Landwood Property Auctions, we are strategically positioned to provide optimal value for both buyers and sellers, aligning our services with market trends and pricing dynamics.”
What advice would you give to both sellers and buyers to ensure they are well-prepared and can secure a favourable outcome at auction?
“Choosing the right auctioneer is crucial for a successful auction experience, start by looking for an auctioneer who understands your asset and can anticipate how buyers will perceive the opportunity. Our team at Landwood Auctions boasts more than 65 years of combined experience, solely dedicated to auction operations, to ensure our clients are in capable hands.
“While online auctions offer flexibility and widen the pool of potential buyers, it’s vital to select an auctioneer with a proven track record. Don’t base your decision solely on promises of the highest price. Instead, evaluate how they support their recommendations and pricing strategies, and their ability to convert inquiries into active bidders.
“When it comes to listing, it is essential to follow the expert advice of an experienced auctioneer and set realistic reserve prices. To ensure you meet and exceed reserve price, transparency here is also key, so provide all necessary information upfront to instil confidence in potential buyers.
“For buyers, thorough research of the market and area is essential. Attend site visits to get a first hand look at the property. Ensure your financing is pre-approved, and set a realistic budget. Additionally, seek independent professional advice on the legal pack and property conditions. Investing in expert guidance before committing to a significant financial outlay can prevent costly mistakes down the line and ensure a smooth transaction process.”
For more information on Landwood Property Auctions and its latest listings visit: www.landwoodpropertyauctions.com
